Since I’m Platinum, whenever I swap, I get 0.5% cashback.
However, when I attempt to exchange, I get 99.6 USDC (with 0.5% cashback included!).
Furthermore, if I flip the currencies, 100 USDC becomes 99.56 USDT (with 0.5% cashback added!).
Why does it not add up to 100? Blockchain costs might exist (spread? ), but they shouldn’t be greater than the 0.5% cashback that is already included, right?
That translates to a spread of 0.4 + 0.5 = ± 0.9%. Is this typical?
The slight discrepancy between 1 USDT and 1 USDC, despite both being pegged to the US dollar, can be due to factors such as market demand variations, liquidity differences across trading platforms, and transaction fees incurred during exchanges. Platforms may apply small spreads or transaction fees, which, alongside blockchain network costs, can result in minor deviations from the exact 1:1 pegged value. Despite incentives like your 0.5% cashback from Nexo, these factors collectively contribute to the observed ±0.9% spread when exchanging between USDT and USDC.
The discrepancy you are noticing when exchanging USDT and USDC can be attributed to several factors such as:
Exchange spread: Even if there are no explicit exchange fees, platforms often have a spread between the buy and sell prices of cryptocurrencies. This spread can vary depending on market conditions and liquidity.
Blockchain fees: While Nexo might not charge exchange fees, there are still underlying blockchain transaction fees. These fees can vary based on network congestion and the specific blockchain used (e.g., Ethereum).
Market fluctuations: The value of stablecoins like USDT and USDC can slightly fluctuate around $1 due to supply and demand dynamics.
Cashback calculation: The 0.5% cashback might be calculated on the net amount after the spread and fees are applied, not on the initial 100 USDT or USDC.